The Business of Music 14.12.12 £5.15
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Cover14.12.12_cover template 07/12/12 15:27 Page 1 50 9 776669 776136 THE BUSINESS OF MUSIC www.musicweek.com 14.12.12 £5.15 Project1_Layout 1 07/12/2012 15:41 Page 1 CoverV5_cover template 11/12/2012 20:01 Page 1 50 9 776669 776136 THE BUSINESS OF MUSIC www.musicweek.com 14.12.12 £5.15 NEWS ANALYSIS BIG INTERVIEW 03 16 14 Introducing gets a Why X Factor’s promotional Box TV boss Gidon Katz on Saturday night slot muscle shouldn’t be in doubt music television, radio and across local radio despite falling ratings Channel 4’s new show BRITISH MUSIC TRADE CONTRIBUTES £5bn TO OUR ECONOMY AND BEGGARS IS PAYING MORE UK TAX THAN APPLE • SO WHY IS THE INDUSTRY NOT GETTING A ‘LEVEL PLAYING FIELD’ FROM GOVERNMENT? Killing us softly? licensed markets. We need finance from the Arts Council POLITICS Snubbed: Osborne’s consumer certainty and CC Skills, Osborne’s I BY TIM INGHAM Autumn Statement brought no mention of and we need A 2011 BPI survey Autumn Statement music industry he British music industry business certainty of overseas earnings from snub has left many has been left frustrated by so we know what the British record industry areas of the business T shows a surplus of £114m a series of Government we are investing feeling like second letdowns – culminating in the in and how to across public performance class citizens. trade being omitted from grow our royalties, sync and Jo Dipple told Chancellor George Osborne’s industry.” licensing Music Week: “British £6m investment handout to The trade has more music is an industry that ‘Creative Industries’ last week. than a year to wait until the can grow fast over the next few Osborne announced he would first practical steps of the years. With the vast global grant Britain’s video games, Government’s Digital Economy demand for our music and the movie, TV and animation Act are implemented – which reach of the internet, we could industries the seven-figure skills many feel will bring about the double our market, or more, with fund in his Autumn Statement Government in several key areas, Dipple said: “We are the first meaningful stage in the fight the right conditions. last Wednesday (Dec 5) – topping including policies to create country that gave people Iron against piracy. Meanwhile, “Why is the Government so up tax breaks that were already certainty around copyright and the Maiden, The Sex Pistols, The concerns exist over state proposals keen to depress our expectations? announced for these markets. cloud, improved access to finance Clash and The Beatles. But we for exceptions to copyright. They won’t implement the DEA. Music was not even mentioned. and powers to quash the secondary need to know what we are And although the music They might soon introduce The Autumn Statement came ticket market and piracy. operating on; we need legal and industry does benefit from proposals for exceptions to just one day after trade copyright that could undermine representatives including UK TAXMAN ROLLING IN IT DEEP BEGGARS PAYS BIG IN ADELE’S RECORD YEAR our ability to derive value from Music’s Jo Dipple and the BPI’s our digital assets when they are Geoff Taylor were called to give Beggars Group paid a tax in the UK in its last published financial year, exploited by third parties for evidence to the influential whopping – and very despite earning an estimated £6bn in the territory commercial gain. Now they can’t Culture Select Committee, which honest – £11.4m in over the period. offer us the same support on skills corporation tax in FY2011, According to The Daily Mail, one of Apple’s two is investigating how the and training. Our industry is according to financial data main UK divisions, Apple Retail UK Ltd, showed it Government can assist music and seen by Music Week. paid tax of just £3.79m on sales of more than being digitised. Our skills base is other creative industries. The company, which holds £500m in the year to September 2010, the latest different to that of 10 or 20 years In the two hour session, Dipple a stake in labels such as XL, accounts available. ago. We are responding to the told the Committee that the music 4AD, Matador and Rough Another subsidiary, Apple (UK) Ltd, paid new challenges but that doesn’t industry needed support from Trade, enjoyed a very profitable 2011 after releasing £6.1m in tax on sales of just under £69m. mean we don’t want a level Adele’s record-breaking album 21, which has sold Said Beggars founder Martin Mills: “It’s pretty hard playing field to other sectors. more than four million copies in the UK. to see why it's in society's best overall interests “The eco-system around raw According to the Its public bill compares very favourably with for overseas based new tech companies to be British talent needs a skilled and Government’s own Creative Facebook UK, which paid just £238,000 in tax in paying lower tax rates than domestic creative highly trained workforce. 2011 on sales of £20.4m – despite an estimate that and rights-owning businesses, let alone for Industries Economic Estimates “Growth will come from its advertising sales generated £175m in the period. Government to discriminate in favour of the former report from December 2011: ‘Music industries like ours which will be & Visual and Performing Arts are Amazon.co.uk generated revenues of more than and against the latter. £3.3bn in the UK last year - but paid no corporation “Paying tax at the proper rates is a civic duty, and able to harness our assets to the the largest employers in the tax on any of the profits from that income. the obligation towards society of those who profit new licensed services of a digital Creative Industries with Meanwhile, Apple paid just £10m corporation from interaction with it.” global market. 300,000 employed in Continues on page 2... 2009’ 02-03 NEWSV5_News and Playlists 11/12/2012 20:16 Page 2 2 Music Week 14.12.12 www.musicweek.com NEWS EDITORIAL ’We need a level playing field’ ...continued from Page 1 music was left out of the that we already make to GDP “I have just given evidence to announcement in the Autumn is recognised. the Culture, Media and Sport Statement. I hope the “For many years through my Committee and our message to Culture, Media and Sport Select position in Live Nation I have them was basically: ‘Give us a Committee will support our call strived to deliver ‘best in class’ Making level playing field and allow us to for a level playing field for music Continual Professional exploit our assets in legal and when it comes to Government Development (CPD) for my the case licensed digital markets.’ support for the creative industries.” existing staff, while seeking out “That’s all we ask from Live Nation Entertainment the best talent for our burgeoning THE BRITISH music industry has a reputational problem. Government. We have fought International COO Paul Latham, business. Having been honoured I’m not talking about the ‘fat cat’-isms spewed forth by hard to be this successful and we who is CCSkills founder chair, to be appointed Chair of Creative copyright infringers. Blame your old boss for those. have the potential for vast fast and Cultural Skills (CCS) I have And I’m not talking about consumers getting angry that they’ve growth in global digital markets. looked to bring their expertise not According to the had to pay a fiver to print off their tickets at home. Blame your “We welcome the recent only into my business but also current boss for those. award from the Arts Department for Culture, Media into all those forward-thinking I’m talking about gorgeous Gideon (sorry, George) Osborne and, Council to help young and Sport: ‘The music industry is one peers. From a standing start we unemployed people find have established over 1,800 more pointedly, the DCMS - neither of whom give this trade the of the UK’s biggest and most culturally dues it clearly deserves. Their reluctance to sprinkle praise and entry-level work in the apprenticeships across the significant creative industries. It contributes investment on what is patently an unfashionable market within music industry. UK real creative industries, none Government is starting to set off pretty deafening alarm bells. Music is launching a nearly £5 billion annually to the of whom would have been Music Week’s bewildered online reportage of Osborne’s Music Industry national economy, of which £1.3bn comes from recognised in George Mentoring scheme, an Osborne’s narrow coterie! Autumn Statement last week - in which £6m of skills funding was exports earnings; it employs around 130,000 apprenticeship scheme, “Now through initiatives allocated to the ‘Creative Industries’ in a proud press release that people; it is the third largest market in the didn’t even mention music - was one thing. But the DCMS training for instigated at UK Music by Jo response perhaps said everything about how music is perceived development inside the world for sales of music and is second Dipple, in conjunction with as a dying dinosaur amongst the very elected powerbrokers who industry, and eventually a only to the USA as a source CCS, we have established a full- could kickstart its revival. skills academy. of repertoire’ time Music Skills Manager to “Help from CCSkills and the work with all the UK Music Arts Council is fantastic and entities to ensure CPD and “Cameron should ask his friends at Apple what recent support of £15m from told Music Week: “The recent recruitment are top of the agenda.